US Treasuries as investors review US economic outlook

U.S. Treasury yields rose on Tuesday as markets reopened after Monday’s Christmas holiday and investors awaited data that could provide new clues about the state of the U.S. economy.

The yield on the 10-year Treasury note rose about three basis points at 6:12 a.m. ET and last traded at around 3.7789%.

Meanwhile, the 2-year Treasury yield last rose more than two basis points to 4.3464%. An auction of 2-year Treasury bills worth a total of $42 billion is set to take place on Tuesday.

Yields and prices have an inverse relationship. One basis point equals 0.01%.

Investors are looking to the latest economic data this year for clues about a looming recession and the path of inflation.

On Tuesday, that includes S&P/Case-Shiller home price data, as well as the Federal Reserve Bank of Dallas’ manufacturing index, which reflects levels of business activity in Texas’ manufacturing sector.

Data on Friday showed that one of the Federal Reserve’s favorite inflation gauges — the core personal consumption expenditure price index — rose slightly more than expected year-over-year.

The Fed raised interest rates in 2022 in an effort to combat persistently high inflation. The central bank raised rates an additional 50 basis points earlier this month after implementing rate hikes of 75 basis points in each of its previous four meetings.

Worries about these rate hikes dragging the US economy into a recession have spread among investors in recent weeks.

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